Analysis: Impact of U.S. Subsidy on TSMC Stock Value

Friday, 12 April 2024, 11:00

The $6.6 billion U.S. subsidy for TSMC to build three chip fabs in Arizona may not significantly impact the stock value. While the subsidy allows TSMC to increase capacity and alleviate fixed costs, the geographical diversification may have limited effect on the company's overall production. However, TSMC remains a top player in the industry with strong growth potential driven by increased demand for AI chips and positive earnings forecasts.
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Analysis: Impact of U.S. Subsidy on TSMC Stock Value

TSMC and the subsidy

The subsidy from the U.S. CHIPS and Science Act supports TSMC's $65 billion investment in building three chip fabrication plants in Arizona.

The state of TSMC as a company

The subsidy is a small fraction of TSMC's cash reserves and current production capacity, indicating limited impact on the company's operations.

Although the subsidy improves capacity in Arizona, TSMC's leading position in the chip market and growth opportunities based on AI chip demand make it a strong investment choice.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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